Cautious optimism in CE according to Deloitte's first Business Sentiment Index |
Cautious optimism is the heartening finding of Deloitte's first Business Sentiment Index – a research-based analysis of the opinions and predictions of Chief Executive Officers (CEOs) of the largest companies within six countries in Central Europe (CE) - Poland, Hungary, the Czech Republic, Slovakia, Croatia and Romania. The publication of the first index has been included in Deloitte's CE Top 500 report.
The survey will be a regular ‘barometer’ that gauges the thoughts of those with greatest influence on the future direction of the economies and largest companies of Central Europe. Their responses include views about the current and future business environment, ranging from employment prospects and payment trends to new product development and capital expenditure.
Findings have been collated into an index which this quarter equals 97 and the next quarter (to be released early December) will compare the differences and similarities of views and attitudes across national boundaries and between industrial sectors.
The index provides a much-needed outlook based not on statistics and balance sheets, but on the human reaction and opinions of 200 influential executives from major business sectors, who are crucial not only to their company's success but, by extension, on the recovery and renewed growth of individual country economies and that of the region as a whole.
Findings
On a general outlook, around three quarters of those surveyed felt the economy in the next year was either going to get worse or remain the same – an unsurprising reaction after such a tumultuous year. Going against this trend for caution and pessimism the survey found that business leaders were conversely quite optimistic about the prospects for their individual enterprises, with only around 15% having negative views about the future. Of the countries surveyed, Poland is the most bullish about its prospects – both in terms of its economy and from a company perspective. Poland has enjoyed continued consumer demand in comparison to other countries in the region. Croatia, on the other hand, is very pessimistic about the economy (89.7% of negative responses).
On balance, the findings show that although there is still deep-seated negativity about the short-term prospects (six months) across the majority of issues discussed, there are definite signs that positive feelings are slowly beginning to counter-balance this pessimism. Selected statistics based on net totals of the sample:
- Despite perceived credit issues globally, almost three fifths (57.9%) of respondents feel credit is still available to them if necessary, with almost a fifth feeling it is easily available.
- Over half believe payment terms are still safe, with over 45% thinking they are fairly safe. • Almost half (45.3%) expect sales revenue to increase over the next 12 months.
- Over half are optimistic (with 44% fairly optimistic) of launching new products of services in the next year.
- Reflecting the trends globally, opinions about employment levels continue to be pessimistic, although over half (52.1%) expect levels to remain broadly unchanged, with 31.6% believing they will reduce somewhat.
- The likelihood of M&A activity is unsurprisingly very slim, with 60% thinking it unlikely for their company to entertain thoughts of takeovers at the moment.
- Over half (51.6%) believe EU grants will be hard to obtain, compared to just over a quarter (25.5%) believing them to be available.
Key facts about the research methodology of the BSI
- A series of 10 to 12 minute interviews were conducted
- We interviewed either CEOs and/or CFOs professionals
- Executives were surveyed about the following issues: economic outlook, company financial perspectives, credit availability, regulatory environment, payment terms, sales, new product development, employment, investments, M&A activity, EU funds (extra question).
- Following sectors covered: automotive, banking, technology, media and telecommunications,, consumer business and transportation, insurance, construction, energy and resources.
- Sample size: N=190
- Fieldwork administration: July 23rd - August 10th, 2009
- Data collection method: Telephone interviews (95% of the sample)
- Languages of data collection: Local or English
For more details please visit: www.deloittece.com/bsi
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